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Local businesses fear pain from sick-leave legislation

The Lowell Sun

Updated:
04/21/2013 07:13:58 AM EDT

By Allison Thomasseau

Statehouse Correspondent

BOSTON -- A bill establishing paid sick leave for Massachusetts workers is being praised by many lawmakers wanting to boost benefits for low-wage earners, but drawing fire from local businesses that say it will hurt profits.

"I like to help all my employees, but you can only do so much, and the sick leave is going to kill us," said Joe Cadette of Leominster, CEO of KCMC Management Inc., which owns 17 Dunkin' Donuts franchises in Central Massachusetts.

The bill, sponsored by Sen. Dan Wolf, would require employers to give employees one hour of paid sick leave for every 30 hours of work.

Businesses with fewer than six employees would have to offer 40 hours of unpaid sick leave each year. Businesses with six to 10 employees would have to offer at least 40 hours of paid sick leave, and businesses with more than 10 employees would have to offer at least 56 hours.

If an employee gets sick before accumulating sick leave, the employer would have to offer unpaid sick leave.

The Institute for Women's Policy Research, a Washington, D.C.-based think tank, estimates that 910,000 Massachusetts workers, or 36 percent of the private sector, do not have paid sick leave.

There are no Massachusetts or federal laws that require sick leave or vacation time. Since 2005, the Joint Committee of Labor and Workforce Development has seen several bills on sick leave, but none passed.

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Wolf, a Harwich Democrat and chair of the joint committee, said momentum for the bill is building. He highlighted Senate President Therese Murray's call to debate a "living wage" as a sign that the political climate is right to pass a labor-reform bill.

The Senate bill, combined with a companion House bill, has more than 90 backers in both chambers, including Democratic Reps. Jennifer Benson of Lunenburg and Ken Gordon of Bedford, as well as Sens. Barry Finegold of Andover, Michael Barrett of Lexington and Jamie Eldridge of Acton.

"It's common sense to give people a certain number of days of a year to deal with sickness in the family," said Barrett, committee vice chair.

Eldridge, who called the proposal a "modest benefit," said the public-health benefits outweigh the costs that businesses will face.

"Do we want people, because they earn so little, they are forced to go to work, and could get the customer sick?" Eldridge said.

John Regan, executive vice president of government affairs at Associated Industries of Massachusetts, said government mandates on benefits could crimp efficiency.

"We're trying to successfully run a business and will do that in manner that's appropriate, and that includes benefits," Regan said.

Regan said people should acknowledge that "business people are smart enough to figure that out for themselves," without government intervention."

Businesses split on whether to support the proposal.

Cadette, who has 200 employees in his Dunkin' Donuts franchises, estimated that the sick-leave law would cost him thousands of dollars and he would have to lay off employees or cut back on worker hours.

"The overhead is really high, and if we have to give (sick leave) to everybody, it's going to hurt," said Cadette, who considers himself a small-business owner.

According to the state Executive Office of Labor and Workforce Development, of the 7,311 employers in Northern Middlesex, about 3,200 have fewer than five employees, and 1,100 have fewer than 10 employees.

Of the 6,522 employers in Northern Worcester, about 2,800 have fewer than five employees, and 1,100 have fewer than 10 employees.

Jon Hurst, president of the Massachusetts Retailers Association, said the legislation would be a problem for customer-service businesses, such as retail stores and restaurants, as companies need to pay for an extra worker to cover a shift.

"You can't give lower levels of consumer service and expect those customers to come back, so you end up paying two people for one," he said.

Hurst is also concerned that people would take advantage of sick days and max out on paid leave.

However, Wolf, who owns Cape Air, said his workers usually use half of their 40 hours of sick leave.

"It never imposed a great economic burden," said Wolf, whose business has more than 1,000 workers.

Jessica Wilson, executive director of Lowell Telecommunications Corporation, said the organization offers its 12 staff two weeks of sick leave to show the staff they are valued, even though most do not use it all.

"The ability to stay home when you're sick seems like a small thing, but it means a lot to people, and it means a lot to our employees," Wilson said.

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